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Question 1 You are considering an additional product in an existing product line. What is the incremental cashflow of the new product given the following information: • Sales of the new product will be 198m but sales of the existing products will fall by 22m. • Expenses related to the new product will be 76m but the loss sales on existing products will cause existing expenses to fall by 11m • Depreciation on the new equipment will be 17m • Tax rate is 21%

Question 1 You are considering an additional product in an existing product line. What is the incremental cashflow of the new product given the following information: • Sales of the new product will be 198m but sales of the existing products will fall by 22m. • Expenses related to the new product will be 76m but the loss sales on existing products will cause existing expenses to fall by 11m • Depreciation on the new equipment will be 17m • Tax rate is 21%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question 1 You are considering an additional product in an existing product line. What is the incremental cashflow of the new product given the following information: • Sales of the new product will be 198m but sales of the existing products will fall by 22m. • Expenses related to the new product will be 76m but the loss sales on existing products will cause existing expenses to fall by 11m • Depreciation on the new equipment will be 17m • Tax rate is 21%
Transcribed Image Text:Question 1 You are considering an additional product in an existing product line. What is the incremental cashflow of the new product given the following information: • Sales of the new product will be 198m but sales of the existing products will fall by 22m. • Expenses related to the new product will be 76m but the loss sales on existing products will cause existing expenses to fall by 11m • Depreciation on the new equipment will be 17m • Tax rate is 21%
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